Hermès International, the French luxury apparel house, became the eighth-most expensive firm in the Stoxx 600 index when its market value rose beyond € 200 billion (US $ 218 billion).
Only neighbouring French juggernaut LVMH Moet Hennessy Louis Vuitton, valued at US $ 459 billion is above the brand, which also lifted the fortune of its controlling shareholder Bernard Arnault past US $ 200 billion this year.
Arnault, 74, became the first person outside of the US to surpass the US $ 200 billion milestone, joining Elon Musk and Jeff Bezos as the only people to ever do so.
The price of Hermès’ stock has been rising all year, and even if it concluded the day just a little bit below its weekly and yearly highs, it was still up 27.09% for the year as a whole. Only seven other European businesses are valued higher as a result: AstraZeneca, Novo Nordisk, ASML Holding, L’Oreal, and LVMH.
According to Bloomberg, the upscale manufacturer of Birkin bags and silk scarves is now worth more than a number of French industry leaders, including the likes of Airbus, Renault, Vivendi, Carrefour, Societe Generale, and Orange.
In the meantime, analysts are hard at work raising their target prices for Hermès ahead of its 14th April presentation of first-quarter earnings.
With China’s post-Covid recovery and reopening having witnessed a rebound in demand for premium, high-end clothing and accessories in Asia, which has been largely blocked off since the epidemic, investors have grown more confident that the global luxury business can endure any economic slump.
Despite starting prices of US $ 10,000 and beyond for the most popular models, demand for Hermès handbags often surpasses its production capacity; anecdotal accounts point to some airport stores being shown only due to lack of availability. The resale value of many designer bags is also very high.
Despite the fact that sales have more than doubled since a decade ago, Hermès still runs its global operations out of about 300 locations. But, there are plans to increase production, and Hermès will launch a new leather-producing facility in Louviers, Normandy.
China, though, has been the spark. Following the lifting of Covid-19 limitations in several locations last summer, demand across the nation started to increase again. Sales have also increased in the major luxury markets of France, Italy, and the UK as a result of the free-spending US tourists’ return to Europe, which has been aided by the strong dollar.
